Development assistance in Vietnam

Overview of Australia's aid program to Vietnam

How we are helping

2013/14 Actual: $138.9 million

2014/15 Budget Estimate: $141.3 million

Vietnam is one of Australia's most important and valued regional partners and Australia has a national interest in working together with Vietnam to overcome poverty. Vietnam’s centrality in the region means that a stable and growing Vietnam is good for regional cooperation, security, trade and prosperity. Australia has a valuable contribution to make in Vietnam by building on the successes and lessons learnt from two decades of bilateral development cooperation.

Vietnam has made enormous gains in development. More than 35 million people have been lifted out of poverty since the early 1990s as a result of rapid economic growth and reforms. The mortality rate of both infants and children under five has halved since 1990. Average life expectancy has increased from 49 years in 1970 to 75 today. Vietnam could achieve all Millennium Development Goals by 2015 with increased effort in access to sanitation and HIV prevention.

While poverty rates have improved in Vietnam, there remains a group of poor who have missed the economic opportunities of recent years. Around one in every 10 Vietnamese still lives in extreme poverty—on less than US$1.25 a day. Most are poorly educated, rely on agriculture and live in remote locations with few services. They include ethnic minorities at disproportionate levels. Income inequality is growing between urban and rural communities.

Vietnam is one of the most disaster-prone countries in the world with around 70 per cent of its population at risk of typhoons, torrential storms and flooding. These events, as well as an economic crisis, could easily push people who have risen above the poverty line in recent years back into poverty.

In 2010, Vietnam joined the ranks of lower middle income countries. Vietnam hopes to become a higher income industrial economy and to reduce poverty rates to a single digit level within the next decade. This cannot be achieved without sustainable and equitable economic growth. It also cannot be achieved without solid and reliable infrastructure, an appropriately skilled workforce and strong institutions. These constraints have been repeatedly identified by the Government of Vietnam, donors and the international business community. Australian aid is targeting these areas of need where there are good prospects for success and where we have a track record and deep understanding.

Helping Vietnam overcome poverty, maintain growth and achieve sustainable development is important for regional prosperity and security and is in Australia’s national interest. Australia will work constructively to facilitate growth and progress Vietnam’s greater economic integration. This will be both directly, through policy engagement and economic reform initiatives, and indirectly, through scholarships and training, infrastructure and water and sanitation programs. This suite of Australian investments will assist Vietnam’s continued economic development and further enhance Australian trade and investment opportunities.

Improve the quality of Vietnam’s human resources

Having a skilled workforce is essential for Vietnam to meet its objective of becoming an industrialised country by 2020. Australia's support focuses on three areas: improving individuals' skills and impact; strengthening public institutions; and promoting Australia-Vietnam linkages. Australia is providing quality postgraduate education to Vietnam’s lecturers, researchers, government employees and development workers, through Australia Awards Scholarships.

Develop better transport infrastructure and policy to support economic integration

Australia is supporting Vietnam’s economic integration through investments in hard infrastructure to improve local and regional connectivity (with a particular focus on the Mekong Delta), and via analytical and advisory assistance.

As Vietnam transitions to a middle income country and integrates with the global economy, it needs to reform its institutions and policies in a way that will stimulate a new period of growth that promotes opportunities for all. This includes reforms in areas like finance, banking, industry, state-owned-enterprise, competition policy and land policy. Australia is helping Vietnam build a sound evidence base to inform this process.

Increase rural access to clean water and hygienic sanitation

Australia plays a lead role in the water and sanitation sector, promoting new and low cost technologies and innovation. In recent years, Australian support has focused on geographic areas which are most in need of assistance, and importantly has been able to leverage the Government of Vietnam’s own significant investments to improve poverty targeting, focus on hygiene and sustainability and provide an entry point for gender equality and disability discussions, particularly in schools.

Addressing climate change is key to ensuring that Vietnam’s hard won development gains are not undone and that food security is guaranteed for millions of its people.

Australia is working with Vietnam in an effort to better understand the impacts of climate change, identify and implement appropriate adaptation measures (focusing on the Mekong Delta, the area of greatest risk) and support Vietnam’s efforts to promote low-carbon growth.

We are working with communities in the Mekong Delta to adapt to the impacts of climate change and protect food security and livelihoods.

Related documents

Hospitality students at KOTO (Know One Teach One) in Ho Chi Min City, Vietnam. KOTO is a not-for-profit restaurant and vocational training programme which is changing the lives of street and disadvantaged youth in Vietnam (credit: DFAT).